1.1. Capital flows. Money coming from abroad into Spain

Under Spanish law, you can only enter and leave Spanish territory with a capital not exceeding 10,000.00 euros per person and trip. Larger amounts must be declared to customs control. You should also find out what the limits of tax and customs in your country of origin are to avoid offenses and administrative infractions.

1.2. Private documents of sale.

The conveyancing process takes place in several stages. Some occur between private persons and take place before a notary public. Generally, the seller agrees with the buyer that the property should be reserved for some time, prior deposit of about 10% of the price of the property. This operation is formalized in a private documents, which can have many different names and have certain differences in their legal nature: earnest money contract (contrato de arras), purchase option (opción de compra), reservation document (documento de reserva), promise of sale agreement (promesa de compraventa), etc. In these documents we could find the basic conditions for the future purchase, like the deadline of the signature, purchase price, distribution of expenses and taxes between buyer and seller and the consequences of failure to formalize the future sale (usually the loss of the deposit -if the buyer defaulted- and the return of twice the amount paid -if the seller defaulted-).

1.3. Signature of the deed of sale

It is made before a notary public, and it contains the sales contract. Generally, on the date of signing of the deed the full price is paid, the key is delivered and, with it, the possession of the property. According to the rules of Money Laundering Prevention, payment must be made with bank intervention, usually with a check drawn from a non-resident current account. Therefore, the buyer must open a bank account in Spanish territory. Also, before the date of signature, you must have obtained the NIE (identification number for foreigner).

1.4. Mortgage

If you need a mortgage, a representative of the bank has to appear at the notary public to sign simultaneously another deed: the mortgage loan agreement. Before signing the mortgage contract, bank and buyer will have had to agree to the terms and conditions: financing, repayments, and so on.

1.5 Paying taxes.

After signing the deed, you should pay the taxes. For this purpose, the buyer must be registered in the Spain’s Agency for Tax Administration (Agencia Tributaria) as a taxpayer, otherwise you will not be able to pay taxes.

1.6. Registration in the Land Registry.

Once you have paid the conveyancing taxes, the property must be registered in the Land Registry in order to enjoy the maximum legal protection. Conveyance taxes must be paid to make the registration enter into force.

2.1) Taxes (in force on the date of 2011/06/24)

2.1.1) Second hand property

Normally in Andalusia (Costa del Sol) conveyance taxes are distributed as follows:

Paid by the buyer:

– Tax on property transfers (ITP – Impuesto sobre Transmisiones Patrimoniales): 8% on the price of the sale.

Paid by the seller:

– Tax on the increase in value of urban green field sites, local tax (Impuesto sobre el Incremento del Valor de los Terrenos de Naturaleza Urbana

– Plusvalía: A variable amount to be determined in accordance with the cadastral value of the land and other factors. This amount may be _ small or large, and could be as much as three thousand euros. It is advisable to get information from the Town Hall before signing any contract or document.

2.1.2) New properties / homes

Paid by the buyer:

– Value-added tax, VAT (Impuesto sobre Valor Añadido, IVA): 10% in the case of houses and garages attached to housing; 21% in the case of independent garages and premises.

– Stamp Duty Tax (Impuesto sobre Actos Juridicos Documentados- I.A.J.D.): 1,5 % on the price of the sale.

Paid by the seller:

– Tax on the increase in value of urban green field sites, local tax (Impuesto sobre el Incremento del Valor de los Terrenos de Naturaleza Urbana

– Plusvalía: A variable amount to be determined in accordance with the cadastral value of the land and other factors. This amount may be _ small or large, and could be as much as three thousand euros. It is advisable to get information from the Town Hall before signing any contract or document.

2.1.3) In case of mortgage financing

In Andalusia, to be paid by the buyer:

– Stamp Duty Tax (Impuesto sobre Actos Juridicos Documentados – I.A.J.D.): 1,5% on borrowed capital, interest and court costs.

2.2) Notary fees

According to custom in Andalucia, fees will be paid by the buyer

2.3) Land Registry fees

Paid by the buyer.

2.4) Lawyer fees

Buyer and seller will pay the bill of their respective attorneys, or will split the fees between them if only one lawyer is hired by mutual appointment.